UTI AMC files for IPO to raise up to ₹4,000 cr as existing investors exit

The UTI Asset Management Company has filed draft red herring prospectus with market regulator the Securities and Exchange Board of India for launching an initial public offer to offload 3,89,87,081 equity shares of ₹10 each.

The overall IPO includes offer-for-sale by the existing investors which include SBI, LIC and Bank of Baroda that will sell 1,04,59,949 equity shares each while Punjab National Bank and T Rowe Price International will offload 38,03,617 equity shares.

The offer includes a reservation of up to 2,00,000 equity shares for eligible employees. The overall offer would constitute at least 30.75 per cent of the post-offer paid-up equity share capital of UTI Asset Management Company.

The IPO, which is expected to garner ₹3,500-4,000 crore, will provide an exit route for the existing investors and will not bring in any fresh capital for the fund house. However, the listing of equity shares will enhance its brand image and provide liquidity to the existing shareholders, said UTI AMC.

The fund house has appointed Kotak Mahindra Capital, Axis Capital, Citigroup Global Markets India, DSP Merrill Lynch, ICICI Securities, JM Financial and SBI Capital Markets as the Book Running Lead Managers to the offer.

AUM at ₹1.54-lakh cr

As of September 30, UTI AMC’s a quarterly domestic average asset under management of ₹1,54,200 crore and other AUM of ₹6,25,500 crore.

The management fees in respect of the domestic mutual funds accounted for 73 per cent of its total income for the six-month period ended September 30.

The company’s consolidated income was down 4 per cent at ₹500 crore in the first half of this fiscal against ₹520 crore logged in the same period last year.

For the financial year ended March 2019, income was down seven per cent at ₹1,080 crore against ₹1,160 crore recorded in previous year.

However, the fund house’s net profit was up 50 per cent at ₹210 crore (₹140 crore) in the first half ended September. For the fiscal ended March, 2019 the net profit was down three per cent at ₹350 crore (₹360 crore).

The equity shares will be listed on BSE and NSE.